IBISWorld Market Research
Over the five years through 2019-20, the industry is expected to begin its recovery from the ravages of EI and the Hendra virus.
Melbourne, Australia (PRWEB) April 01, 2015
The Horse Farming industry has had a tough run over the past five years, recovering from the effects of the 2007-08 outbreak of equine influenza (EI) while confronting new outbreaks such as the Hendra virus in 2011-12. The industry has also been adversely affected by volatile trends in the downstream horse racing sector and by uneven spending by Australian households on horses and horse racing. According to IBISWorld industry analyst Anthony Kelly, “the Horse Farming industry has benefited from increased prize money offered on local races and from the use of shuttle stallions by large players such as Darley Australia and Coolmore Stud to boost the quality of locally bred horses.” The outbreak of equine influenza caused widespread damage across the country's horse farming and racing industries as movement restrictions meant that breeding was delayed or foregone altogether. The onset of the global financial crisis in the late 2000s and the outbreak of the Hendra virus also adversely affected investment into the horse racing sector and the performance of the Horse Farming industry. Industry revenue is expected to decline by an annualised 3.5% over the five years through 2014-15, to $800.0 million. This poor performance has accompanied a slump in industry profitability and led to the exit of many small-scale farms.
“Over the five years through 2019-20, the industry is expected to begin its recovery from the ravages of EI and the Hendra virus,” says Kelly. The industry will benefit from slower pace of decline anticipated in the horse racing sector, and is expected to be buoyed by the economic recovery and increases in prize money and average earnings. The average value of yearling sales is anticipated to increase over the next five years. Furthermore, as economic conditions gradually improve, the sale of horses for racing or for recreational purposes will trend upwards. However, these trends will likely not be sufficient to return the industry to sustained growth.
The Horse Farming industry is characterised by many small-scale participants, with almost two thirds of all breeders having only one mare. The four largest players in this industry together contribute about 15.0% of industry revenue. The largest thoroughbred studs, Darley Australia, Arrowfield Stud, and Coolmore, are estimated to generate about half the total service fee revenue for the industry. A study by the Thoroughbred Breeders Association found there are 34 breeders who own more than 49 broodmares each. These breeders own in total about 10% of all broodmares. Over the past 10 years there has also been significant horizontal integration. This significantly reduced the number of family horse farms and can be seen as a response to increased industry globalisation.
For more information, visit IBISWorld’s Horse Farming industry in Australia report page.
This industry consists of establishments mainly engaged in horse farming, which includes breeding of thoroughbreds, other horse breeds and ponies. Thoroughbred horses are predominantly sold to trainers for the horse racing sector, while other breeds are generally sold to the public for recreational purposes. Horse farms are commonly referred to as studs.
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